Digital Transactions Authoritative, insightful and timely information for payments professionals
Digital gift cards are a hot product, and that’s attracting the interest of payments players looking to make acquisitions to enter or bulk up their assets in this market. In the latest deal, the Hamilton, Ontario-based point-of-sale payments platform Ackroo Inc. early Tuesday announced it has agreed to acquire the e-gift card platform offered by GiftFly.com, a 12-year-old business based in New Canaan, Conn.
The deal for GiftFly, valued at $750,000, is set to close later this week and brings more than 4,000 active merchants to Ackroo, nearly doubling the company’s roster of client businesses. It also comes as the digital gift card market is set to explode. Globally, global sales of the products are expected to hit $399 billion this year, up 28% from last year, according to Custom Market Insights.
Ackroo, which says it offers payments and marketing services to sellers “of all sizes,” will pay $350,000 in cash at closing of the deal, with four monthly payments of $100,000 each starting in January. The final installment could be adjusted, based on revenue from the GiftFly business, Ackroo says.
Ackroo has been acquisitive, with the deal for GiftFly representing its 13th overall. One of its largest acquisitions was its $2-million deal early this year for Simpliconnect, a specialist in in-store marketing and so-called client-engagement programs. That deal brought Ackroo some 60 merchants operating 350 locations.
Now, the latest acquisition will help Ackroo push its foothold to the south, according to Steve Levely, Ackroo’s chief executive. “We are … eager to continue to expand into the U.S. market, which this acquisition affords,” he says in a statement. Levely could not be reached for further comment early Tuesday. Levely came to the company in 2012 and became CEO two years later.
